Major Highs Cooking for Chinese Equities!📍 In this position, after clearing the knee-jerk reaction from covid flows we are starting to enter into chapter II, heavy protection. The flows have shown strength in drastic fashion; the apparently bottomless wallet of keynsian economics - suddenly showing a surprising amount of animation! You can see the impact of PBOC on Chinese Equities here:
...and now buyers had a simple win by testing the 2983 highs. The retrace idea was as follows; overprotecting a strategically important structure. The reward was to open up a retest of the support which was an all embracing struggle for the PBOC:
In the long run, the positional struggle from CB's will come down to a struggle between healthcare on one hand and restraining capitalism on the other. It is extremely important to strive for re-openings in sensible fashion since the virus is still in circulation and lusts to expand. Health crisis cannot be solved with throwing money at it... not enough time has elapsed so the Stan Erck pump and dump we are watching with Novavax is set to flop and sadly put the final nail in the coffin for Global Equities.
As usual thanks for keeping the feedback coming 👍 or 👎
Chineseyuan
USDCNH On Key Level! Trading Plan:
USDCNH reached key daily structure support.
touching the underlined level we see a bullish engulfing candle confirming the significance of this level.
on 4H the price is currently forming a right shoulder of inverted head and shoulders pattern formation.
7.09 is its neckline.
wait for a 4H bullish breakout of it and then buy on retest or aggressively (4H candle close above).
the initial target will be - 7.125
if the market goes lower and closes below head level, setup will be invalid.
Chinese Yuan Has Completed The Bullish Setup To Move UpHey friends hope you are well and welcome to the new update from the forex market. The Chinese Yuan has completed the bullish setup and ready to move up against US Dollar. In today's article we will watch the different chart patterns and indicators that are giving signals for the bullish movement of an Chinese Yuan.
A big falling wedge:
On long term monthly chart the Chinese Yuan is moving in a falling wedg. And this is considered as a bullish reversal pattern among the traders community. As this is the long term monthly chart and signals and patterns are more firmed on long term charts, therefore there are more chances that it will follow the bullish reversal behavior of falling wedge. At this time the price line of Yuan is at the resistance of wedge. But this time it will be difficult for the priceline to drop up to the support of this wedge. Later this article you will see that strong reasons why the Chinese Yuan will not reach at the support.
Down channel and synchronized movement with indicators and EMAs:
On weekly chart the priceline can be seen moving within a down channel and the movement within this channel is very much synchronized with the stochastic and Momentum indicators. If you take a closer look at the chart then you will notice that whenever the price line reaches and the support and the stochastic gives bull cross and momentum starts turning bullish then price action takes bullish divergence and reaches up to the resistance of the channel. But this time the priceline of Yuan is almost at the center of the channel and Stochastic has entered in over sold zone and has given bull cross. And the momentum indicator is also changed from strong bearish to weak bearish. Therefore there are more chances that the price action will not move more down to reach the support of the channel. And if the Chinese Yuan will be moved up from here then the exponential moving average 10 can also cross up EMA 21 and this bull cross between the two exponential moving averages can lift the price action more up that can lead to the breakout from this channel.
A double bottom formation is cancelling the bearish move of Head & Shoulder:
On the weekly chart the price action has formed a Head and Shoulder pattern.The formation of this pattern was started from the September 2019. Now the priceline has crossed down the neckline of the shoulder and reached at $0.1395 support. Now the price action is likely to form a double bottom formation that can cancel the bearish rally that was started due to this H & S pattern.
A harmonic BAT formation:
On the same weekly chart the price action of Chinese Yuan has completed the formation of bullish BAT and entered in the potential reversal zone. Now we have seen that the different indicators on the weekly chart has given bullish signals and after formation of Head and Shoulder the priceline is likely to form a double bottom for bullish reversal and finally the price action has also formed a harmonic BAT pattern. And at this time it is in PRZ level. Therefore All indicators and patterns are giving strong signal that Chinese Yuan has completed the setup for bullish reversal. And it can start the bullish rally at any time.
Conclusion:
On the long term signals and patterns are in favor of bulls rather in favor of bears, however the stop loss is must. In this trade we can set the maximum extent of the potential reversal zone as our stop loss.
USD/CNY- How China deals with a US trade tariffs. Simple- Chinese Yuan currency devaluation by stealth over time against all major trading partners. Effectively, eliminating the effects of the trade tariff altogether.
Chinese Yuan Is Going To Beat US Dollar Very HardStrong bullish rally and retracement at golden ratio:
The Chinese Yuan has been moving up with a strong bullish rally since June 2007 to January 2014 that is almost seven years that the Yuan has been moving up against the US dollars. Then from January 2014 to January 2017 the Chinese Yuan moved down and retraced at 0.618 Fibonacci level that is the golden ratio therefore there were strong chances that it will again move up from this golden ratio and as per expectations the Chinese Yuan moved up again and took another powerful bullish divergence from January 2017 to March 2018 and this move was upto 11.48% for more than a year.
Then from March 2018 the Chinese Yuan again started moving down against the US Dollar and at this time it is again at the same golden ratio of 0.618 Fibonacci level
.
Down channel and volume profile and other indicators:
If we switch to the weekly chart then it can be clearly observed that from August 2018 the priceline of Chinese Yuan is now moving in a down channel. After August 2018 the price line has hit at the support of the channel on September 2019. Even though this time after hitting the resistance of the down channel the price action of Yuan is moving down but we can expect that this time the priceline will not reach the support of the channel. If we examine the price action of Yuan then in August 2018 we had the bollinger bands at the support of the channel. And when in Sep 2019 the price action was hitting for the second time on the support the channel at that time the bollinger bands was again at the support of the channel. But this time the Bollinger bands is above the support of this channel and there is a big distance between the support and the lower bands of the bollinger bands. Therefor this time the bollinger bands can play the role of biggest hurdle to stop the price action to move down up to the support of the channel.
Here I have also placed the volume profile on the complete price action moving within this channel and after placing the volume profile it can be clearly seen that the trader’s interest is very low below the $0.14. That is almost the same level where we have the lower bands of the Bollinger bands. And the point of control of the volume profile is at $0.1450 that is above the resistance of the channel. Therefore there are strong chances that the price action can move up at anytime at least up to the POC level of the volume profile. Because the point of control of the volume profile always works as a center of gravity for the priceline and whenever the candlesticks move up move down it always pulls back the price action towards itself. And if we see the behavior of the priceline since August 2018 up till now then it can be clearly seen whenever the price action moved up or moved down then it always moves back to the POC level.
Here I have also placed the stochastic and momentum indicators. And after placing these indicators we can observe that these both indicators are working in very synchronized manner with Bollinger bands. Whenever the price action hits the Bollinger bands support and stochastic and momentum both give the bull signals together then the priceline moves up to hit the resistance of the channel. Once it was happened on the candlestick of 27th August 2018 and after that the second time it was happened on the candlestick of 9th September 2019. At this time we can see the stochastic is again very close to the oversold zone and momentum is also bearish. Therefore I am again waiting bullish signals from these two indicators for the next bullish rally.
Bullish harmonic BAT signal:
The strongest bullish signal that I have received is that the price line of Chinese Yuan has completed a bullish BAT harmonic pattern on weekly chart. the formation of this harmonic move was started with the candlestick that was opened and closed on 2nd September 2019. And 1st leg was completed on the candlestick that was opened and closed on 28 January 2020. Then the priceline has been retraced upto 0.50 Fibonacci retracement level this was the first confirmation of the bullish BAT harmonic pattern. After this move we needed the Fibonacci projection between 0.382 to 0.886 Fib projection area of A to B leg and we can see that from 17th September 2020 to 9th March 2020 Chinese Yuan projected between this projection level that was the second confirmation for the bullish harmonic BAT pattern.
And finally the priceline is again dropped down and retraced upto 0.786 to 0.886 Fibonacci level and this is a final confirmation of completion of bullish BAT pattern. Now at this time the price action is moving in the potential reversal zone of this bullish BAT and at anytime the price action of Chinese Yuan can move up with a powerful bullish divergence. And as per Fibonacci sequence of sequence if BAT pattern it can be project between 0.382 to 0.786 Fib projection level of A to D leg.
Conclusion:
We can expect buying zone from $ 0.1407 to $ 0.14 because at $0.14 we have strong supports. And realistically sell target can be from $ 0.1423 to $ 0.1448.
If the Chinese Yuan will breakout the channel then we can even expect more powerful bullish rally against US Dollar for years.
USDCHNThis looks like an amazing opportunity for a sell. Price has broken out of the cloud, lagging span has also broken out of the cloud and it has broken my previous Higher Low. Lets see where this pair takes us
The NFP and the OPEC data & few reasons for pessimismFriday promises to be an extremely eventful and interesting day. On the one hand, statistics on the US labor market will not let you get bored in the currency and stock markets, and on the other hand, the results of the OPEC meeting will determine the dynamics in the oil market. We will talk about this and much more in today's review.
But let's start traditionally with news about the coronavirus. As the number of cases in the world grows, measures to contain the epidemic are tightened. Italy closes schools and restricts public gatherings. Companies continue to revise their forecasts for financial results. Quite frightening figures were noted by the International Air Transport Association. According to their experts, the industry’s losses from coronavirus may amount to $ 113 billion.
And there are already the first victims of this. Chinese Tourism and Financial Conglomerate HNA Group Co. was taken under state control. That is, in fact, the company ceased to exist as an independent entity. Indicative in this case is the fact that one of the main reasons for the fall of the company was its high debt cut (about 85 billion). The evidence is that this is generally very typical of Chinese companies (overblown debts). HNA Group Co. clearly demonstrated how quickly one of the fastest-growing companies can go bankrupt. In general, there are enough reasons for pessimism.
Realizing the impasse of monetary incentives, more and more countries are using fiscal instruments (mainly increased government spending) as a measure to combat the effects of coronavirus. Asian countries are so far ready to pour in up to $ 40 billion, and the United States - about $ 8.
They are also trying to fight the consequences of coronavirus in OPEC. Today there is an attempt to carry out the following agreement: to withdraw from the market another 1.5 million b/d with a minimum of the end of the second quarter. So far, Russia remains a stumbling block. If she can be persuaded, a very serious reason for price increases will appear in the oil market. So today we will buy oil in the hope that everyone will agree. The deal seems to be quite good, if only because the stops are relatively small (places below 44 or closes on the fact of negative news), but the profits are very ambitious (an increase of up to 57 or even higher for the WTI brand).
The key event of the day for other financial markets will be the publication of statistics on the US labor market. Since the data will be for February, there is a risk of failure in the numbers of NFPs in connection with the coronavirus epidemic. However, the dollar has already lost quite a lot in the foreign exchange market, and the data from ADP came out unexpectedly good, so today we will buy the dollar.
ridethepig | Flash Crash In Play For AUDCNH !!A major breakdown ahead of the open as markets catch up to the virus disruptions. AUD and global trade are set to suffer for sometime, it will take a brave man to step against this flow.
On the monetary side, RBA tee'd up a rate cut in April with another in Q3 on the cards. Housing has already done the heavy lifting, will need A LOT more help from elsewhere to create a positive outlook in the near-term for AUD. PBOC in a 'whatever it takes' moment with the printer starting to overheat.
On the technicals, the doldrum 4.7-4.9 range remained intact throughout 2019. Since the new decade we have broken the lower end in the range via coronavirus trigger, a screaming warning for what is cooking globally. We are sitting at key support 4.5 which needs to hold otherwise we have a flash crash in play towards 4.3 - 4.25. Unless buyers step in quickly we are set to lose support on panic. Continue to sell weakness if we lose support.
For those tracking USDCNH :
For those tracking EURCNH :
Lastly, for those tracking Chinese Equities :
Best of luck all those in CNH, risks come from further PBOC intervention although looks like they ran out of time! Thanks all for keeping the likes, comments and charts coming!
ridethepig | EURCNH Market Commentary 2020.03.01Here we go for a round of important chart update on the FX, Commodity and Equity board... I do not subscribe to the idea of this being the start of the euro reserve currency rally which we were tracking earlier in the year that failed from the Coronavirus short-circuit, although it is certainly moving with speed. Remember we have month end flows in play now too and to put the 🍒 on top the virus still not under control.
I am expecting further downside in euro as the outbreak continues to delay the recovery in trade for Europe, now it is crystal clear if it wasn't already that the EUR really holds the key to pandora's box for those wanting to play the reflationary trade. This has been delayed till later in 2020 via the deflationary shock from COVID-19. Tracking 1.05xx-1.04xx in EURUSD.
On the CNH side, the PBOC intervention is notable:
Advise selling rallies in Chinese Equities for now, the demand for currency will increase as long as the virus shows no signs of abating. I expect this cross to grind towards the 7.40 levels where it would be very attractive for those mid and long-term macro players to buy the dip into 2021. On the technical side, Strong resistance is found at 7.73 / 7.75, use this to sell into and target the support at 7.40 / 7.38.
Thanks as usual for keeping your support coming with likes, comments, charts and etc!
Beating continues, what to do with euro, yen & poundYesterday was largely typical of the current week: investors continued exodus from risky assets and increased positions in safe-haven assets. Perhaps the main result of the day can be considered the return of the yen to the fold of safe-haven assets. Recall that last week, after the devastating data on Japan's GDP, there was talk that the yen could no longer be a full-fledged refuge. But, judging by its growth yesterday, it’s quite possible for itself. True, such a strong growth of the yen raises questions, but are its buyers too carried away? In the end, no one canceled the failed GDP data, as did the fact that the country was one step away from the recession. So today we are inclined to look for points for purchases of a pair of USDJPY.
Meanwhile, a survey of European companies operating in China showed that 577 out of 577 respondents surveyed expect their performance to worsen due to the epidemic and the downtime of the Chinese economy. The results, although obvious, are no less indicative of this.
The epidemic continues to expand around the world (the number of new cases in the world steadily exceeded the number of new cases of infection in China) and the point is not even the increase in the number of new cases, but the fact that an increasing number of countries are taking certain preventive measures, including restricting travel, school closures, etc. All this, ultimately, will lead to an increase in the scale of economic losses.
Well, the list of companies that have publicly announced the deterioration of their financial results in the future has been replenished with such titans as Microsoft, Anheuser-Busch InBev, etc. Actually, as we predicted in our previous reviews.
Investors, meanwhile, are urgently reviewing their expectations regarding the actions of the Central Banks. In particular, 90% of traders expect a Fed rate cut in April. So yesterday's dollar difficulties in the foreign exchange market are generally understandable.
Nevertheless, the growth of the euro against the dollar seems very abnormal to us and we are inclined to sell a pair of EURUSD today in double, if not triple volumes. Recall that the Eurozone economy continues to experience serious difficulties, and this is still without the consequences of a coronavirus. The situation in Italy also does not contribute to the purchase of the euro. Therefore, we sell the euro against the dollar at full capacity.
As for the general list of our positions for today, it is generally unchanged: we are looking for points for buying gold (but we are careful - we buy on the slopes with mandatory stops), we sell oil, we sell EURUSD, we buy GBPUSD. The only sales of USDJPY today we are replacing with the purchase of a pair with small stops.
The Chinese Yuan Devaluation It appears that the Chinese Yuan is to devalue (much) more.
Fundamentally, the Chinese governement is coming up with countermeasures to offset the effects of the SARS-CoV-2 virus outbreak; which has also disrupted global trade activities.
Technically, the USDCNH chart is on the verge of a break out, with MACD and OBV poised for support.
Target for USDCNH is 7.15 as marked out in the chart.
Watch the daily chart for the soon to happen breakout...
Week results - between Brexit the NFPThe main event of the previous week was not a meeting of the Bank of England or even a decision of the Fed (both the Central Banks left monetary policy parameters unchanged). This is not data on US GDP (annual growth rates have been the weakest since 2016: 2.3% in 2019 compared to 2.9% in 2018), but the coronavirus epidemic in China. Yes, so far the epidemic has been localized in China. But this is not easier. The magnitude of the coronavirus epidemic has already exceeded the 2003 SARS. And the World Health Organization declared the outbreak of coronavirus a global emergency.
So last week, the markets were busy on the one hand counting the victims of the epidemic (more than 300 deaths and more than 15,000 cases), and on the other hand, counting the economic damage. China extended the New Year weekend for another week. That is, another week 2/3 of the Chinese economy will be closed. The magnitude of the losses is not yet clear, as the epidemic continues, but it is already clear that we are talking about tens of billions of dollars. The chances of China's GDP growth rate dropping below 6% now seem almost 100%.
So the fears and concerns of the global recession have intensified. The Chinese stock market today is trading in a deep minus (about -8%) despite all the efforts of the Government and the Central Bank.
Despite such a regrettable situation, trading is an opportunity that can and should be taken advantage of. For the long-term, it is worth selling in super bought stock markets, but in the medium-term and locally, the purchase of safe-haven assets (gold and the Japanese yen) and the sale of risky assets such as the Russian ruble look great.
Actually, we voiced this plan last week, but as the epidemic grows, the relevance of our positions only grows.
Another significant event of the past week was Brexit. On January 31, Great Britain officially left the EU. We already wrote that buying pounds remains one of the best trading opportunities at FOREX in terms of potential in 2020. Whether it is implemented or not will show the progress of trade negotiations between the UK and the EU. But if successful, a pound above 1.40 could very well become a reality.
The upcoming week will be saturated with various kinds of macroeconomic statistics. But the main attention will still be focused on Friday statistics on the US labor market and NFP figures. Our thoughts and forecasts on this subject will be described closer to Friday. In the meantime, we continue to monitor the development of the epidemic and investor sentiment.
Coronavirus impacted Chinees yuan Coronavirus has damaged financial markets of China. Chinees stock droped almost 7%, economic grow with 2%. Of course Chinees yuan planged after market open today, now trading at 7.0202, next target 7.0719
Could positive momentum on USD/CNY continue? Risk overall continues to ebb and flow on US-China trade uncertainty and looks somewhat asymmetric, tilted to the downside, based on our view that the HK Bill if passed through the House of Reps could seriously complicate trade talks and the signing of Phase 1. Stock markets are on the rise, and the risk-on atmosphere is weighing on USD, JPY and gold.
Last week the US dollar made its the best performance in nearly 3 months against the Chinese Yuan. USD/CNY is likely to hold below 7.05/04 in the near-term with a possible decline likely to be limited around 7.00-6.95.
On other side, the technical indicators are constructive, and there appears to be near-term potential rally to the 7.06/08 resistance area (the highs since October's end). The dollar moved above its 20-day SMA for the first time since mid-October. Also on the 4-hour chart this SMA coincide to the middle line of the Bollinger Badns and the price broke above it. It may offer support now.
You should take in mind also China PMIs data at the end of the week. Another decline could seriously impinge on the soft landing narrative markets have been forming over the past few weeks and draw a market-negative reaction.
ORBEX: TOO Many "Insurance" CUTS! Where Risk Takes Us?In today’s #marketinsights video recording, I talk about #Fed's rate cut and identify the main components leading to their decision.
I also talk about their decision toolbox and wonder whether they should start looking at slowing inflation with a different eye? One that doesn't look at trade wars with such certainty.
With Fed, BOC and now also BOJ out, we can't miss the opportunities appearing on #cadjpy and #usdcnh, can we?
Stavros Tousios
Head of Investment Research
Orbex
This analysis is provided as general market commentary and does not constitute investment advice
USD/CNH: Revisit short in USDCNHWith US and China likely to have found a temporary truce in their Trade War till the APEC meeting in Nov, and USDCNH trading into the daily Ichimoku cloud, the time to re-visit a short in USDCNH may soon be at hand!
USDCNY: New Long-term Pattern for risk seeking investors.The pair is currently pulling back after an annual high earlier this month with 1D already having turned neutral (RSI = 52.349, MACD = 0.019, Highs/Lows = -0.0174). This appears though to be only a technical Higher High retrace after what has been a very strong bullish sequence since mid April.
We have spotted the very same pattern in 2014/2015 when USDCNY made Higher High after Higher High within a two year Channel Up. This Channel emerged after a Double Top and currently we see the same candle action after a nearly May/ June Double Top. The MA200 is there to support the uptrend long term and the MA50 to provide Buy Entries.
Under these circumstances currency traders can target 7.3000 on the medium term and 7.6000 - 7.8000 on the long term.
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Comments and likes are greatly appreciated.
USDCNH Quick Scalp setup to watchHello traders.
Wait for the next daily candle to trade up through today's high and confirm the swing low.
Target resistance
Good luck traders.
Forex Markets: RBA’s Rate Cuts LoomThe Australian dollar bounced off its lows today in the forex markets, although the Reserve Bank of Australia hinted at negative rates.
In a similar manner, the New Zealand dollar perked up as firmer-than-expected Chinese yuan fixing boosted risk sentiment.
The two currencies typically serve as liquid proxies for traders to hedge against emerging market risks. Australia and New Zealand also share China as their top trading partner.
The Aussie dollar traded higher at $0.67955 after the People’s Bank of China set the daily midpoint for the yuan.
Markets expected less strong fixing, but it came at 7.0211 yuan per dollar. This dispelled fears that China was going full-gear against the US, triggering a currency war.
The RBA’s Plan and the Forex Markets
RBA Governor Philip Lowe recently hinted at “unconventional methods” the bank could use to prop up the Australian economy.
Coming up the top is the prospect of negative interest rates. With negative interest rates, the bank aims to weaken the Australian dollar against other peers.
This could theoretically boost spending, charging the economy. On top of that, exports will get a boost from a weaker currency.
Although Lowe admitted no guarantee, such a plan is no longer new in the case of central banks. To boost their own economies, Switzerland, Japan, and Europe have adopted ultra-low rates. Japan, for one, has a below-zero interest rate.
Elsewhere in the forex markets, the yen is currently gaining traction, reaching stellar levels as hedge funds hoard the currency.
Concerns over the ongoing US-China trade war still loom large, with economists thinking it could eventually lead to a recession.
Against the US dollar, the yen reached 105.32, near its highest since March 2018. The yen also flexed against the euro and the British pound.
Source: www.financebrokerage.com
USD/CNH (We can see some pull back first)View On USD/CNH (27 May 2019)
We can see that it has hit decent strong resistant region of (6.9 to 6.95) and it make take a pullback for now.
So, it can make a pullback to 6.88 to 6.86.
So, do not aggressively go LONG at this moment.
All the best.
DYODD, Our trade analysis may not suitable to intraday (or) short time frame trading.
Whatever method you use if you do not follow the proper rule of risk management, it will have detrimental effects on your account.
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The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose.
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